In Brief
Farmers stored Byadgi chillies and other agricultural produce in a cold store, which obtained fire insurance. A fire destroyed the entire stock in January 2014. The insurance company refused to pay, claiming the farmers were not parties to the policy and the fire was deliberately set. The Supreme Court held that farmers are 'consumers' under the Consumer Protection Act as beneficiaries of the insured service, with standing to claim despite lack of contractual privity. The fire was accidental (electrical short circuit), not arson. The insurance company must pay the value of goods per warehouse receipts plus 12% simple interest from the date of fire. The amount is applied first to discharge the Bank's outstanding loan with interest, with any surplus paid to the farmers.
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